Learn about the new law

Published 8:00 pm, Tuesday, March 23, 2010

In a well orchestrated, but nevertheless touching ceremony, President Barack Obama on Tuesday signed health care reform into law. This is the culmination of a year of negotiation and hard work in congress, yet few Americans can articulate what it really means for them. How will their paychecks and their health care be affected by this massive change in the way America runs and pays for heath care?

The ultimate result of the law, the government says, is that 32 million Americans who do not currently have insurance will be covered. Starting this year, insurers will be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. This provision is likely unpopular with insurance companies, but it is morally correct. The practice of dropping people when they most need insurance coverage is unconscionable, and it never should have been legal.

Most other changes will not take effect until 2014 or later, and hopefully by then Americans will have a firmer grasp on the law. As analyses are published, the Huron Daily Tribune will do its part on keeping readers informed, but like anything, it’ll be up to the individual to ensure they are knowledgeable about the law and are able to take full advantage of tax credits and other cost-saving measures when they become available.

According to the Associated Press, here are a few key points:

• MEDICAID: Expands the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. Childless adults will be covered for the first time, starting in 2014. The federal government will pay 100 percent of costs for covering newly eligible individuals through 2016.

• TAXES: The bill applies an increased Medicare payroll tax to investment income and wages of individuals making more than $200,000 a year, or married couples above $250,000. The tax on investment income would be 3.8 percent if the Senate acts on a package of changes this week — higher than originally proposed. If the Senate follows through, the legislation also would impose a 40 percent tax on high-cost insurance plans worth more than $10,200 for individuals and $27,500 for families. The tax would go into effect in 2018.

• INSURANCE MARKET REFORMS: In addition to the aforementioned reforms, parents will be able to keep children on their coverage up to age 26. A new high-risk pool will offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Major consumer safeguards will also take effect in 2014. Insurers will be prohibited from denying coverage to people with medical problems or charging them more. Insurers will not be able to charge women more.

• EMPLOYER RESPONSIBILITY: Employers are hit with a fee if the government subsidizes their workers’ coverage. Contingent on approval by the Senate this week, the $2,000-per-employee fee would be assessed on the company’s entire work force, minus an allowance. Companies with 50 or fewer workers are exempt from the requirement.

• HELP FOR SMALL BUSINESSES: Businesses with 25 or fewer employees that offer health coverage to their work force will get tax credits. The credits will start this year and rise in 2014 to a maximum of 50 percent of the cost of premiums offered by the smallest businesses, those with 10 or fewer workers.

• SUBSIDIES FOR INDIVIDUALS: The aid is available on a sliding scale for households making up to four times the federal poverty level, $88,200 for a family of four. Premiums for a family of four making $44,000 will be capped at around 6 percent of income.

• HOW YOU CHOOSE YOUR HEALTH INSURANCE: Small businesses, the self-employed and the uninsured could pick a plan offered through new state-based purchasing pools called exchanges, opening for business in 2014. The exchanges will offer the same kind of purchasing power that employees of big companies benefit from. People working for medium-to-large firms will not see major changes. But if they lose their jobs or strike out on their own, they may be eligible for subsidized coverage through the exchange, and insurers could not deny them coverage.